![You would think Facebook CEO Mark Zuckerberg would hate his brainchild to be used for misinformation, but then again the ...](/content/dam/images/g/o/4/w/u/r/image.related.afrArticleLead.620x350.gsys4a.png/1480318782545.jpg)
When Facebook CEO Mark Zuckerberg earlier this month outlined a series of steps his giant social network would take to combat the spread of fake news on user timelines, it was viewed as a welcome about-face from his earlier stance that it just wasn't a problem.
Yet, there was just one small, embarrassing issue.
For at least some users, the ads adorning Zuckerberg's missive on Facebook were for – you guessed it – fake news sites.
This was pointed out by Ev Williams, who as co-founder of Facebook's struggling rival Twitter and the CEO of publishing platform Medium, is not immune from bias.
Still, it was the perfect illustration of Facebook's fake news problem, which many observers think affected the recent US election result, and fear might be spiralling out of control.
Facebook, the social network where people go to provide asinine updates about their lives and, increasingly, argue about politics, has always been annoying.
Facebook the corporation has always been impressive, at least from the perspective of entrepreneurs and investors. Because what the company has achieved on the business front in a short few years is nothing short of incredible.
In barely a decade, the company has emerged from a Harvard dorm room to become a global colossus, with a market value of $US354 billion ($475 billion).
Even though it insists it is not a media company, Facebook has become the top source of news for millennial audiences in the world's biggest economy.
With many publishers relying on it as their top source of referral traffic, it has arguably become the most powerful media organisation the world has ever seen.
During that meteoric rise, Facebook has had to contend with some pretty significant challenges. Mostly, it has dismissed them with ease.
For instance, people were once worried about its ability to cope with a consumer transition away from desktops to mobile devices. Now, more than 1 billion people use Facebook on a mobile device each day.
Facebook's 'moral challenge'
But with fake news, Facebook is facing a challenge on another level entirely. The fear here is that it has unleashed a beast on society it can't control.
It is not hard to hypothesise why fake news proliferates on Facebook. Nobody outside of the company knows how the opaque algorithms powering its news feed really work, but we do know the company's entire business is heavily built on engagement.
It tries to serve you content you are likely to interact with. So if you are inclined to think Hillary Clinton is part of a global financial conspiracy or that the Pope should endorse Donald Trump, then you might be inclined to engage with content suggesting this is the case.
You would think a person like Zuckerberg, who bequeathed 99 per cent of his vast wealth to charity would not want his brainchild to be used for misinformation – but that's just a hunch.
It is worth noting that while the backlash against Facebook is well and truly under way in media and political circles it is yet to spread to the sharemarket.
Despite being caught up in a mini Trump tech stock slump, Facebook shares are still up 15 per cent in 2016, outperforming the 8 per cent rise for the broader benchmark S&P; 500.
That said, the fake news controversy comes just after Facebook admitted problems with the calculations of internal metrics it had promoted to investors. Facebook is therefore in serious danger of squandering the credibility it has built up with advertisers and investors.
Yet fake news is not just a business challenge, it is a moral challenge. The question now is whether Zuckerberg and Facebook have the will to overcome it.